Solstad in Vessel Lay-Up, 300 Workers Must Go

Oslo-listed Solstad is looking to lay-up additional vessels as it expects a weak market in AHTS and PSV segment, despite recording a year-on-year profit rise in the second quarter.

Nevertheless, loss from the previous quarter has pulled the Norway’s shipowner down into the red during the first half of 2015.

Namely, the company posted a profit of NOK 218 million ($26.5 million) in the second quarter of 2015, an increase compared to NOK 89 million ($10.8 million) in the corresponding period in 2014, but still not good enough to counter the loss of NOK 236 million ($28.6 million) in the first quarter this year, leading to an overall 1H 2015 loss of NOK 18 million or approximately $2 million.

The company generated higher revenue from all three segments (CSV, AHTS, PSV) in first half year of 2015 as compared to last year. Revenue for the second quarter was NOK 1,060 million compared to NOK 876 million in the same period in 2014, while revenue for the first half of 2015 was 1,970 million (NOK 1,719 million in 1H 2014).

According to Solstad, the increase in revenue is mainly a result of changes in fleet (approximately NOK 130 million), a significantly higher currency rate on the USD against NOK and higher utilization in the CSV-segment.

However, during the second quarter 2015, Solstad has written down the booked value of four vessels by a total of NOK 125 million and booked a realized currency loss of NOK 30 million.

At the end of the quarter, the company’s market value was approximately NOK 900 million, with fleet of 46 wholly owned or partly owned vessels, 1,700 onshore and offshore personnel and a total firm contract backlog of about NOK 10 billion.

Solstad said it believes that the market will continue to be weak in the remaining part of the year and also in 2016, and therefore has decided to lay-up up to 13 vessels. According to the company, 10 vessels, mainly PSVs and AHTSs, will be laid-up by the end of 2015 and this will consequently slash the the workforce by approximately 300 positions.